Our research argues that information technologies play a central role in the creation of knowledge-based product development. Based on our observation on manufacturing industries, the research argues that information technologies can contribute not only to efficiency improvements but also to improved hypothesis creation capabilities in engineers and organization. It discusses the factors that hinder the effective introduction of ITs as well as the potential management and organizational requirements for successful adaptation.Regarding post industrial products like game software, the research finds that sharing a common field (Ba) has enabled Japanese firms to flexibly apply the knowledge-based product development. Ba has been nurtured by the collaboration between a leader and team members, and the implementation of co-creation has been based on the smooth exchange of information and sense of fraternity among participants.In addition to the Ba of micro level, i.e. organizational "Ba", our research presents a hypothesis that dynamics of game software development can be adequately perceived from the viewpoint of macro level "Ba", i.e. industrial clustering. We insist the finding of "Tokyo Game-soft Cluster" and attempt at inquiring why the observed clustering has been emerged.Major factors affecting the firms' locational preference include the quality of developmental condition of a certain space defined by the existence of educational institution, access to market, etc. The paper also emphases the amenity aspect of the space, i.e. the quality of community life inviting the flow of innovative creators. The most remarkable area from this viewpoint is found to be "Yamanote-line South" Cluster inside Tokyo.